United States District Court, S.D. Mississippi.
HERCULES TIRE & RUBBER COMPANY INC. PLAINTIFF/ COUNTER-DEFENDANT
ROBISON TIRE COMPANY, INC. DEFENDANT/COUNTER-DEFENDANT/CROSS-PLAINTIFF
AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC. CROSS-DEFENDANT
MEMORANDUM OPINION AND ORDER
STARRETT UNITED STATES DISTRICT JUDGE.
matter is before the Court on the Motion to Dismiss 
filed by Plaintiff/Counter-Defendant Hercules Tire &
Rubber Company, Inc. and Cross-Defendant American Tire
Distributors Holdings, Inc. After reviewing the submissions
of the parties, the record, and the applicable law, the Court
finds that this motion should be granted in part and denied
March 7, 2016, Plaintiff/Counter-Defendant Hercules Tire
& Rubber Company, Inc. (“Hercules”), brought
suit against Robison Tire Company, Inc.
(“Robison”). On June 15, 2016, Robison filed its
Answer , which asserted numerous counterclaims against
Hercules and brought in American Tire Distributors Holdings,
Inc. (“ATD-H”), as an additional party. ATD-H is
a competitor of Robison and became the parent corporation of
Hercules in January 2014.
is a tire distributor and entered into a purchase agreement
(the “HPA”) with Hercules, which was renewed in
November 2013. Under the HPA, Robison was granted exclusive
territory to sell certain Hercules products. In August 2014,
Robison fell behind on its payments to Hercules. In September
2014, Robison and Hercules came to an agreement as to a
payment plan regarding the past due invoices (the
“September Agreement”). In October 2014, however,
Hercules demanded full payment of the outstanding amounts at
the alleged behest of ATD-H.
also had a dealer agreement with Goodyear which was set for
renewal in January 2015. Robison alleges that, due to
pressures placed on Goodyear by ATD-H, that agreement was not
Standard of Review
withstand a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.; see also
In re Great Lakes Dredge & Dock Co., 624 F.3d 201,
210 (5th Cir. 2010) (“To be plausible, the
complaint's ‘[f]actual allegations must be enough
to raise a right to relief above the speculative
level.'”) (quoting Twombly, 550 U.S. at
555). A complaint containing mere “labels and
conclusions, or a formulaic recitation of the elements”
is insufficient. Bowlby v. City of Aberdeen, Miss.,
681 F.3d 215, 219 (5th Cir. 2012) (citation and internal
quotation marks omitted). However, “detailed factual
allegations” are not required. Iqbal, 556 U.S.
at 678, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S.
at 555, 127 S.Ct. 1955). Although courts are to accept all
well-pleaded facts as true and view those facts in the light
most favorable to the nonmoving party, courts are not
required “to accept as true a legal conclusion couched
as factual allegation.” Randall D. Wolcott, M.D.,
P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011)
(citations omitted). “[W]hen a successful affirmative
defense appears on the face of the pleadings, dismissal under
Rule 12(b)(6) may be appropriate.” Miller v. BAC
Home Loans Servicing, L.P., 726 F.3d 717, 726 (5th Cir.
2013) (quoting Kansa Reins. Co. v. Cong. Mortg. Corp. of
Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)).
the choice-of-law provision of the HPA states that Ohio law
is to be applied, the parties generally agree that Ohio law
applies to all claims sounding in contract and that
Mississippi law applies to all claims sounding in tort. Their
disagreements over choice-of-law are focused on the unlawful
termination claim Robison brings, and the Court will
therefore address those arguments under its analysis of that
Joinder of ATD-H
and ATD-H argue that ATD-H has not been properly joined in
this suit because the “cross-claim” against it is
not proper under Rule 13(g) and because it is not a
third-party defendant under Rule 14(a). However, though
Robison incorrectly labels ATD-H as a
“cross-defendant” and the claims against it as
“cross-claims, ” and has admitted that this was
inartfully done, its Answer  correctly joins ATD-H under
Rule 20(a)(2). Rule 13(h) allows for “the addition of a
person as a party to a counterclaim ” so long as it
meets the requirements of Rule 19 or 20. Fed.R.Civ.P. 13(h).
Rule 20(a)(2) allows for the joinder of defendants so long as
the claim arises “out of the same transaction,
occurrence, or series of transactions or occurrences”
and there is a common question of fact or law. Fed.R.Civ.P.
is no question that ATD-H was properly joined with respect to
the tortious interference claim pleaded against both ATD-H
and Hercules, and all the claims against only ATD-H were part
of the same series of events as the claims against Hercules
and involve common questions of fact. Therefore, the Court
finds that, though incorrectly labeled a
“cross-defendant, ” ATD-H was properly joined as
a party under Rules 13(h) and 20(a)(2).
Breach of Contract - HPA
claims that Hercules breached the HPA by selling their
products to ATD-H within Robison's exclusive territory.
However, the HPA explicitly states that “HERCULES
assumes no responsibility for any PRODUCTS which may be sold
in the TERRITORY by others” and that it “reserves
the right to sell in the TERRITORY any of its products or
services.” (HPA [11-1] at ¶ 2.) With this
language, Hercules retained the right to sell its products in
Robison's exclusive territory and denies responsibility
if third parties, such as ATD-H, sell its products in the
territory. Therefore, Hercules actions in selling ATD-H its
products within Robison's exclusive territory could not
have breached the HPA because the HPA specifically allowed
for it. The breach of contract claim regarding Hercules'
breach of the HPA, then, must fail, and it will be
dismissed with prejudice.
Breach of Contract - September Agreement
argues that Hercules also breached the September Agreement,
which was a modification of the HPA. Hercules counters that,
because the HPA contained a clause prohibiting oral
modification, the September Agreement is not enforceable.